While my blog was knocked off the air for several days due to the massive DDoS attack on Typepad (my blog hosting service), former FDIC Chairman stepped up to the plate and held high the mighty fist of snark, which he shook at one of our favorite subjects for snark attacks: Operation Choke Point.
In an opinion piece for the American Banker (paid subscription required), Bill minced no words.
The Justice Department's "Operation Choke Point" is said to be targeted at online payday lenders that lend into states that prohibit payday lending. But the operation is being pushed far beyond its stated objective of targeting online payday lenders violating state laws and is having potentially devastating impact on lawful check cashing and small loan businesses. This in turn will cut off tens of millions of people from much needed access to money to meet emergency needs.
No matter what your personal view may be of payday lending or check cashing services, Operation Choke Point should be both alarming and repugnant. It is a direct assault on the democratic system and free-market economy that have made the United States the most powerful and prosperous nation in world history.
Without color of law and based on a political agenda, unelected bureaucrats at the Department of Justice are coordinating with some bank regulators to deny essential banking services to companies engaged in lawful business activities. Bankers operating under the yoke of an oppressive regulatory regime are being cowed into compliance.
If lawful payday lenders and check cashers can be driven out of the banking system because someone in the government doesn't like them or what they do, what lawful businesses are next?
Oh, let's see...hmmm...tax anticipation refund lenders...deposit advance lenders...rent-to-own businesses...pawn shops...car title lenders...subprime automobile lenders...any bank that charges an overdraft fee, a late payment fee, an NSF fee...basically, any business that serves the fog-brained poor who need unlicensed lawyers like Clarence Darrow Warren to do their thinking for them. And who better to pick what lenders ought to be able serve the disenfranchised than folks who make more on average than the folks they regulate? Especially those folks who have to take basic training courses about the businesses after they're hired to regulate them at such high salaries.
Keep ranting, Bill. We need all the bile we can muster to choke off the Choke Pointers.